In this episode of Money and Taxes from BB to XYZ, Jason Speciner, CFP®, EA, and Regina Neenan, CFP®, ABFP®, continue their equity compensation series with a look at incentive stock options (ISOs) and non-qualified stock options (NSOs). They explain how these employer-granted options work, what happens when you exercise them, and why the tax consequences can look very different depending on which type you have and when you sell. From cashless exercises and capital gains to the alternative minimum tax (AMT), Regina and Jason show why stock options can offer valuable opportunities but also require careful financial and tax planning.

Takeaways

• NSOs and ISOs are taxed differently, especially when you exercise your options, making it important to understand exactly what type of grant you have.
• ISOs can offer preferential tax treatment, but taking full advantage of it may require navigating AMT and meeting specific holding-period requirements.
• Stock options shouldn’t be considered in isolation. Your exercise strategy should account for taxes, cash flow, diversification, and the risk of becoming overly concentrated in your employer’s stock.

Have a question for the show?

Email [email protected], and Jason or Regina might answer it in a future episode! New episodes drop every other Thursday, and they’re always ad-free with no subscription required. Learn more about FPFoCo at fpfoco.com and connect with us on social media @fpfoco.

Disclosures

Jason Speciner and Regina Neenan are investment advisor representatives of FPFoCo, a registered investment advisor. The information in this podcast is for general educational and entertainment purposes only. It may not apply to your individual circumstances and should not be considered financial, investment, or tax advice.

© 2026 FPFoCo